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Public spending on transportation and water infrastructure totaled $416 billion in 2014; about one-quarter of that spending came from the federal government. Adjusted to remove the effects of inflation in the prices of materials and other inputs, public purchases of infrastructure fell by 9 percent from their peak in 2003 to their 2014 level. That decline occurred almost exclusively within the category of capital purchases, which fell by 23 percent after adjusting for inflation.

CBO regularly evaluates the quality of its economic forecasts by comparing them with the economy’s actual performance and with forecasts by the Administration and the Blue Chip consensus (an average of about 50 private-sector forecasts).

CBO’s forecasts generally have been comparable in quality with those of the Administration and the Blue Chip consensus. When CBO’s projections have proved inaccurate by large margins, the errors have tended to reflect difficulties shared by other forecasters.

CBO’s estimate of the output gap—the percentage difference between actual and potential output—gauges slack or overheating in the economy. For the latter half of its 10-year projection period, CBO projects that actual output will grow at the same rate as potential output but fall short of potential by about half a percent, on average—matching the average estimated gap between actual and potential output from 1961 to 2009.

Given constraints on discretionary appropriations, ESPCs may help agencies to invest in energy-efficient equipment and reduce energy costs. However, compared with paying for such investments up front with appropriated funds, such contracts result in greater financing costs to the government.

CBO projects that, under current law, the federal budget deficit will fall to $468 billion in 2015 – 2.6 percent of GDP – and remain roughly stable, as a percentage of GDP, through 2018. After that, the gap between spending and revenues is projected to grow, raising the already high level of federal debt.

CBO anticipates that, under current law, economic activity will expand at a solid pace in 2015 and the next few years, reducing the amount of underused resources, or “slack,” in the economy.